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Facebook Q1 Sales Exceed Estimates, Profit Falls Short

May 2, 2013

Facebook Inc's first-quarter sales topped estimates, a sign that chief executive Mark Zuckerberg is making headway in a drive to make more money from mobile ads.

First-quarter sales rose 38 per cent to $1.46 billion (1.1 billion), Facebook said in a statement yesterday. That compares with the average estimate of $1.44 billion, according to data compiled by Bloomberg.

So far this year Facebook, which employs 500 people in Ireland, has unveiled new software for smartphones, added tools for marketers and revamped News Feed, the first thing members see when logging onto the network of more than a billion users.

Investments in upgrades to attract more users on mobile devices and advertisers are beginning to pay off, according to Michael Pachter, an analyst at Wedbush Securities Inc in Los Angeles.

"They're monetising it better and better and better," said Pachter, who rates the shares outperform. "They're making progress - and dramatic progress."

During the first quarter, mobile made up about 30 per cent of advertising revenue, expanding from 23 per cent during the fourth quarter. Pachter had predicted about 25 per cent.

Facebook, based in Menlo Park, California, were little changed in extended trading. The shares declined 1.2 per cent to $27.43 at the close in New York, leaving them down 28 per cent since the company's initial public offering a year ago.

First-quarter profit excluding certain items was 12 cents a share, compared with the average analyst projection of 13 cents.

Operating costs rose 60 per cent to $1.09 billion, as Facebook added more staff and poured money into computer systems and software. Net income attributable to shareholders rose 58 per cent to $217 million, compared with $137 million a year earlier.

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Source: Copyright Irish Times 2013

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